Basal cell carcinoma is the most prevalent cancer in the western world, showing a rapid increase in incidence. Activation of the Sonic hedgehog͞Patched (PTCH) signaling pathway because of PTCH1 inactivation is a key event in sporadic and familial basal cell carcinoma development in humans and is associated with transcriptional activation of specific target genes, including PTCH1 itself. These changes are analogous to the situation in Drosophila where hedgehog activates the zinc-finger transcription factor Cubitus interruptus, leading to increased transcription of target genes. In the present study, we show that mice ectopically expressing the human Cubitus interruptus homolog GLI-1 in the skin develop tumors closely resembling human BCCs as well as other hair follicle-derived neoplasias, such as trichoepitheliomas, cylindromas, and trichoblastomas. Furthermore, examination of the tumors revealed wild-type p53 and Ha ras genes. These findings firmly establish that increased GLI-1 expression is central and probably sufficient for tumor development and suggest that GLI-1-induced tumor development does not depend on additional p53 or Ha ras mutations.G enetic studies on patients with nevoid basal cell carcinoma syndrome (NBCCS), which predisposes affected individuals to the development of multiple basal cell carcinomas (BCCs), have led to the identification of inactivating mutations in the human homolog of the Drosophila gene patched (PTCH1) as the defect underlying this syndrome (1, 2). In addition, a number of surveys have provided evidence that mutations in the PTCH1 locus is a significant cause of sporadic BCCs as well as other hair follicle-derived neoplasias such as trichoepitheliomas (TEs) (3-5). The other common genetic alteration in BCCs is a mutation in the tumor-suppressor gene p53 (6).In biochemical assays, Ptch1 has been shown to bind the ligand Sonic hedgehog (Shh) (7,8). Ptch1 is a transmembrane protein that together with Smoothened (Smoh), a seven-transmembrane protein, forms a receptor complex for Shh (9, 10). Ligand binding results in derepression of signaling from Smoh and subsequently to activation of the transcription factor Gli, the mammalian homolog to Drosophila Cubitus interruptus (Ci). Three Ci homologs have been identified in mammals, Gli-1, Gli-2, and Gli-3, which share a highly conserved zinc-finger domain with Ci and are believed to function as the most downstream components in the vertebrate Sonic hedgehogPatched signaling pathway (11,12). The precise roles played by the three Gli genes have not yet been fully defined. GLI-1 was originally isolated as an amplified gene in a glioma and can transform primary rat cells in cooperation with adenovirus E1A (13). Several lines of evidence suggest a role for Gli-1 in mediating the Shh signal: first, Gli-1 is expressed in cells that are responsive to Shh (14,15). Second, elevated Gli-1 expression is observed in Shh-treated cells, and third, ectopic expression of Gli-1 in the dorsal midbrain and hindbrain mimics the effects of ectopically expres...